With prices fixed and labour costs rising, many must implement cost-saving measures to survive, association says

Tim Hortons franchise owners across Ontario are implementing cost reductions such as forcing employees for the first time to pay for their own uniforms or take unpaid work breaks to offset the impact of minimum wage hikes imposed by the provincial government.

But the franchisees have been ordered by the company’s owner, Restaurant Brands International, not to talk about it and are threatened with retribution if they do, according to the association which represents more than 60 per cent of the iconic coffee shop’s franchise owners across Canada.

“Franchises are not allowed to speak to the media for fear of retribution and being served default notices by RBI,” said a spokeswoman for the Great White North Franchisee Association, which represents more than 1,000 Tim Hortons owners across Canada.

“If they do, they will put themselves in jeopardy and they are very aware of that,” said the association spokeswoman, who asked that her name not be used.

One franchise owner in Windsor — who also asked to remain anonymous — confirmed Thursday they have been told not to talk to the media about the provincial legislation that went into effect Jan. 1, raising the minimum wage from $11.60 to $14 per hour, plus a variety of new benefits that part-time workers must now receive that will negatively impact the businesses’ bottom line.

Since franchise owners do not have the right to increase menu prices, they have introduced a series cost-cutting measures.

A high-profile story this week from Cobourg revealed the children of the co-founders of the franchise, Jeri Horton-Joyce and Ron Joyce Jr., will force eligible employees to pay for a portion of their health and dental benefits, plus forfeit paid work breaks at the two Tim Hortons locations they operate.

The association’s spokeswoman said it was “unfortunate” the children of the founders were singled out, but their situation is typical of the “real burden” being faced by franchisees of Tim Hortons.

“These are small business owners, some with their life savings invested,” she said. “They are no different from many small business owners across Ontario doing the same cutbacks.”

Ontario Premier Kathleen Wynne weighed in on the controversy generated by Tim Hortons and defended the minimum wage hike. She attacked the children of the restaurant chain’s co-founders.

“Like many others I was upset to read reports about how Ron Joyce Jr. – a man whose family founded the Tim Horton’s chain which was sold for $11.4 billion – is treating his employees and responding to the recent rise in the minimum wage,” Wynne said.

“The many people who get up and put in a full day’s work in this province deserve to be paid decently and, just as importantly, they deserve to be treated decently.”

Forcing employees at Tim Hortons to sign off acknowledging their breaks will now go unpaid “is not decent and it’s not fair. It is the act of a bully,” the premier said.

“If Mr. Joyce wants to pick a fight, I urge him to pick it with me and not those working the pickup window and service counter of his stores.”

The coffee shop chain has been majority-owned by the Brazilian investment company 3G Capital, since 2014. 3G Capital controls 51 per cent, with stockholders holding the rest.

The Tim Hortons franchisee association was formed last March after franchise owners joined together out of frustration regarding RBI’s iron grip on menu prices and all paper and food products, which must be purchased at steep prices.

The new provincial legislation has further put Tim Hortons owners “in a difficult situation” of implementing the new minimum wage increases, their association says.

“It is the goal of the (association) and its members to mitigate job losses if at all possible, and as a result, franchisees have been forced to take steps to protect their businesses in this new fiscal reality brought on by these substantial labour cost increases,” said the association’s board of directors in a statement.

“Many of our store owners are left no alternative but to implement cost-saving measures in order to survive,” the association says.

Officials from the Canadian corporate office for Tim Hortons would only release a brief statement Thursday regarding the controversy.

“Almost all our restaurants in Canada are independently owned and operated by small business owners who are responsible for handling all employment matters, including all policies for benefits and wages, for their restaurants,” the statement said.

“Restaurant owners are expected to comply with all applicable laws and regulations within their jurisdiction.”